Minnesota Gift Tax Now in Effect

As I have previously discussed, the Minnesota gift tax tookeffect yesterday, July 1, 2013, making Minnesota the second state to tax largegifts between residents.

Most residents won’t be affected by the gift tax, which onlytaxes Minnesotans who give more than $1 million in taxable gifts during theirlifetimes.  Imposed in addition to thesimilar federal gift tax law, the new Minnesota law places a 10 percent tax ongifts over $14,000 to a single recipient in a single year.

The new tax is expected to generate around $13 million in2014, but many people believe the primary purpose of the new law is to discourage those trying to avoid the estate tax. 

See Nick Woltman, Minnesota Gift Tax Kicks in Monday,TwinCities.com, June 28, 2013.